This attacker is playing the long game, waiting for the file storage use case to be entrenched. Timing of the attack is key. The goal is to force a fork and select the most easily controlled version. Kill freedom money by making self-custody and node running difficult.
Read, looks good. Will install when available.
Why Bitcoin’s 21M cap is not guaranteed
- The protocol can cap issuance at 21,000,000 BTC.
- Markets can create claims on far more than 21,000,000 BTC.
1) What the 21M cap does — and doesn’t — guarantee
- Hard cap guarantees: the consensus rules won’t mint block rewards beyond schedule without a social revolt/chain split. That’s it.
- Hard cap does not guarantee: that your brokerage note, ETF share, wrapped token, or exchange balance is backed 1:1 by spendable UTXOs. Claims can multiply without touching issuance.
Synthetic supply machinery:
A) Paper (futures/perps/options/swaps/ETNs) âžť notional balloons without spot.
B) Custodial wrappers/ETFs/treasury cos âžť share lending, loose redemption, rehypothecation.
C) Reuse collateral across balance sheets.
D) Exchange fractionalization.
E) Basis/AP games dominate price.
F) Off-chain IOUs at miners/OTC.
Bottom line: you can easily have 30–50M “BTC-equivalent claims” trading claims-to-claims while only ~19–21M coins exist. The protocol cap remains true; the market cap of claims does not.
In other words, you can’t enforce the 21 million cap by proxy.
The only real enforcers: your node, your keys, miners including your tx. Everything else is proxy exposure with policy risk.
2) Bottom line
Bitcoin’s 21M cap is a protocol invariant. It is not a shield against synthetic supply created by ETFs, funds, wrappers, futures, structured notes, and rehypothecation.
In a world where incentives > ideals and control > fairness, paper beats metal: claims will proliferate, upside will be contained, and the effective supply for price discovery will expand — unless enough capital insists on self-custody + verifiable reserves and pushes back on policy-driven pool/template drift.
Once you see the settlement stack — on-chain BTC at the bottom, and layers of IOUs, wrappers, and derivatives on top — the rest is incentives, not ideals.
More context: https://controlplanecapital.com/p/why-bitcoins-21m-cap-is-not-guaranteed
So we're back to the "gold" problem. The only way to avoid this is self-custody and proof of reserves. Not your keys, not your coins.
If I were a sophisticated nation state actor intent on controlling BTC:
I would be in favor of Corev30 changes, so that it would be easy to SPAM BTC with CSAM, create/enforce regulations so that most sane people would stop running nodes.
Centralization achieved, BTC as freedom money dies.
The debate boils down to: Is the bitcoin network openly supportive or openly hostile to arbitrary data storage?
Nothing beats BTC in self custody. Use BTC treasury companies with money trapped inside the legacy system, such as 401(k).
Required reading.
As a full-time consumer of BTC content, this is the best info and analsys I've read in years. Absolutely a must read!
This is absolutely the best analysis I've read. Bravo!
In order for BTC to survive as freedom money, the blockchain must be as lightweight as possible so as many people as possible can run full nodes.
Anything which compromises this principle should be considered an attack.
I agree in principle.
However, estimating human population into the future is uncertain. The subset who truly understand BTC, is still quite small.
Let us pray that understanding increases.
Running Knots since OP_RETURN controversy was brought to my attention. Thanks nostr:nprofile1qqsggcc8dz9qnmq399n7kp2yu79fazxy3ag8ztpea4y3lu4klgqe46qppamhxue69uhku6n4d4czumt99uq3wamnwvaz7tmjv4kxz7fwwpexjmtpdshxuet59uyft200 nostr:nprofile1qqs8fl79rnpsz5x00xmvkvtd8g2u7ve2k2dr3lkfadyy4v24r4k3s4spz4mhxue69uhhyetvv9ujuerpd46hxtnfduhszrnhwden5te0dehhxtnvdakz7txfg0n nostr:npub1lh273a4wpkup00stw8dzqjvvrqrfdrv2v3v4t8pynuezlfe5vjnsnaa9nk